By Liam Hardy - Spotlight Mining
Somewhere at the foot of a small concrete housing block in the remotest of the remote locations on the planet, there’s a confused Russian Oma, rolling a cigarette and wondering why so many people in shiny gortex and polished boots have disembarked the once daily train from Tynda, in the Amur Oblast along the Baikal-Amur Mainline. The Oma’s husband taps his cane on the cracked stairs, Turisty he tuts, tightening up his braces and returning indoors.
In a way he’d be right, these are tourist geos on an expedition. As a geologist I’m always game for a ridiculous adventure at the drop of a hat and I am fascinated by Russia. The mysteries of which can only partially be captured by modern historic travel books like ‘Among the Russians’ by Colin Thubron. No matter how much I read, or how long I spent trying to interpret my Russian ex’s expressions, I have never managed to comprehend a single thing about the mind or spirit of ‘Russia’.
The thrill of an adventure is probably what led these mac-clad geologists to an unknown Siberian mountainside, rather than the actual potential of discovery. I can relate, I’m a travel bug too and ‘exoticism’ plays a big role in how excited I get about a project. I’m about to enter a pre-IPO seed round with a brand new Kazakh project based on a rush of excitement rather than sound, researched financial logic. I love mystery and discovery and I want to be part of it.
As their rental truck hit the dirt track that follows the trainline north-east, lashings of mosquito repellent and nets would have quickly been adorned. To their immediate north-east, around 60km2 of temperate swamp marks the edge of their target licence, to the immediate north-west around 80km of temperate swamp fills the glacial melt valley. This is not a Uni field trip, there are no neatly exposed strata to map or landscape features to follow, there’s just sand, glacial dumps, ragged fir trees and swamp.
Only on page 18 of Azarga's 2018 PEA are the licence’s 56km2 corner coordinates mentioned, which are very roughly plotted above. With the 4500-inhabitant town of Новая Чара (Novaya Chara) pointed at for reference. A better map is presented in the company’s recent presentation.
These spritely, eager geologists probably chatted about the bumpy dirt road road, the history of the region and the novelty of their mission briefly, before realising they’d been sent on a wild errand. Not even the google, ESRI or LandSat arrays have bothered with yet.
The data provided to the geologists would have seemed promising, 8m thick sediment hosted copper at 0.2-3.5% with silver notes. The company website would have told them access was easy, the historic surveys would have mentioned over 1km of exposure and they’d have been spurred on by the named QP Robin Simpson a respected resource geologist from SRK.
They probably wouldn’t have known until afterwards that Robin had only been to the property twice for compliance, years before and not during any of the 43-101 reliant work.
As the geologists began their plots and it would have become apparent that something was wrong, as they began to flip through their briefing sheets they may have panicked a little, but this is all in the spirit of the adventure..
Only 16 holes were drilled on the property, this is fine, assuming the strata is uniform and mineralisation continuous, but the core was only assayed for silver and copper. No major Geochem was done and only a select 350kg sample was sent for metallurgical testing.
In my opinion, a serious project that plans to become a mine would have spent the extra few € for a proper assay if they thought this was a real mining project. The 2 acid ICP-AAS process used is fine for general metallurgical testing of the extractable Cu/Ag %, but does not show the rock’s actual total grade, only a representative grade for that extraction method. Any extrapolated extraction/grade %’s mentioned are a % of a % and the error margin is not carried in calculation.
The geologists would have wondered why they didn’t have a suitable model of the landscape available. Despite being remote and in a less developed part of the world, skilled professionals have been to the area and photogrammetric models can be made using $1000 drones and free/cheap automated software these days. Surely this kind of super-budget data collection is step A for any project since 2015? (We'd gladly go and do the work for a flight and a packet of peanuts, just to experience the region!).
So here we are, surrounded by sand and swamps, following a short run of drill holes and trenches across a potential copper deposit and we must be thinking ‘What the heck are we doing here’. All the Champanski in the world couldn’t hide the glaring gaps in the project.
The 2018 PEA on the project can essentially be summarised into ‘finish the exploration work’. While it does contain constrained mining plans, based on the limited data available (and tetra Tech did a good job with what they had!), it also mentions significant environmental issues with the project area. It is prone to earthquakes and sits in a highly fragile and sensitive seasonal ecosystem. A small quake could decimate a tailings dam or project infrastructure. Slopes in the loose ground are highly liable to collapse and seasonal floods in the area are thoroughly unpredictable with high rain failing from April onto snowmelt. The regional topography (from my estimations using satellite images) shows this is a sediment filled valley, formed from widespread floodwaters
This makes the project as sensible as many in British Columbia, Finland or Alaska so, weather alone doesn’t knock it out of contention.
The board hold a significant 37% of the project and clearly have a great many years of experience amassed between them in the region. Alexander Molyneux is a well-known name in the public mining space and clearly believes in this project. Likewise, several large regional fund managers sit on the board and hold vested interests in numerous succesful projects.
The copper itself is hosted in a regular syncline fold, with each end of the fold forming the bedrock surface. The host is a sandy-lime unit (I’d guess marls) and not dissimilar to several of the producing Kupferscheifer units that have been mined across Poland and Germany for centuries. So processing is understood and manageable.
The mineralised unit sits under some 20-100m of glacial moraines, famed for their water retention and ‘squishiness’, which can play havoc with plans when trying to shift or engineer anything stable. It also creates an erratic water table and encourages a fast surface flow of precipitation.
While I see real copper mineralisation and a regular mineable structure, I’m not sure it’s entirely logical. Mother nature has played a cruel trick on us exploration geologists, once again, by giving us a whopping great unit of copper but hiding it in a remote swamp, covering it in waterlogged clay and stretching it out over 5.5km.
I like this project as a novel adventure, I love this region and the team are certainly worth backing… But I have little faith that this can safely and cleanly be brought to production without huge environmental impact and risk.
It’s always been my belief that we should show some restraint in our development of projects as a mining community. Sure, go look, drill explore, but take a step back and see the land from the perspective of the animals that live there, the fish that swim the fragile waters and the people who rely on that clean land and water for their limited livelihoods.
At this time, Azarga’s Unkur and Udokan projects are too deep, too fast, in an area that requires patience, study and consideration. I’ll gladly invest in the area and will be following up a few other players. While this one ticks so many great geological boxes, it leaves too many inescapable risks up to chance.
As always with Spotlight Mining’s articles, we are an open forum. These are my immediate opinions after a short read of a few documents. I invite Azarga to reply or join me for a chat to discuss the project and we’ll gladly publish any replies for a rounded argument. There's nothing better for progress than informed debate.
Here's VPX Dr Alexander Yakubchuk on a recent ProAtive interview about Azarga Metals. We've met Alex many times at European and North American events and, I consider him a reliable and friendly source for information:
Spotlight Mining share and produce articles of interest for companies in the junior mining and tech sectors. While we're keen observers, we are not financial advisors, in fact we're not even very good investors ourselves. We encourage you to do your own due diligence and seek professional advice on the risks, before investing any funds. Only ever invest what you can afford to lose.